Why Did Algoma Steel Group Inc. (ASTL) Soar 18.56%?

Algoma Steel Group Inc. (NASDAQ:ASTL) shares have surged 18.56% in pre-market trading on May 12, 2025, marking a significant rebound for the company's stock.

Algoma Steel Group has experienced a challenging period, with its share price declining 23% over the past year. Despite a recent 29% surge in the last thirty days, the company's performance has been underwhelming compared to industry peers. The company's revenue has been declining, which has contributed to a low price-to-sales (P/S) ratio of 0.4x, significantly lower than the industry average of 1.7x.

Analysts predict that Algoma Steel Group's revenue will grow by 8.5% in the coming year, aligning with the industry's expected growth rate of 8.2%. However, the company's recent financial performance, including a 16% revenue decline over the past year and a 38% drop over three years, has raised concerns among investors about the company's future prospects.

Despite the recent stock price increase, Algoma Steel Group's P/S ratio remains below that of most other companies in the industry. This suggests that investors are cautious about the company's ability to deliver on its growth forecasts and are accepting lower selling prices as a result. The company's recent performance and the potential risks associated with its operations may be contributing to the lower P/S ratio.